Motorola Mobility CFO: ‘Failure Is Not an Option’

With 2012 coming to an end, it’s time again to look at a group of CFOs who will factor prominently in their companies’ successes and failures over the next 12 months. This year’s list includes veteran finance chiefs taking on expanded roles and well-known names looking to make a mark on their new companies – including one who stepped back into a divisional role that could send her career to new heights.

If Vanessa Wittman can help Google make a success of last year’s $12.5 billion acquisition of cellphone maker Motorola Mobility, she will have cemented her reputation as a top-notch fixer.

But to do that she will have to stop the unit from dragging down Google’s margins. Adjusted for certain charges, Motorola Mobility posted an operating loss of $151 million in this year’s third quarter, giving the division an operating margin of minus 5.9%.

Motorola Mobility

For Vanessa Wittman, “failure is not an option” as she looks to participate in “one of the most dramatic transformations in an American business” as the CFO of Google’s Motorola Mobility unit.

The 45-years-old Ms. Wittman is, in her own words, “drawn to the flame,” which may partly explain what brought her to Google from her previous job at insurance broker Marsh & McLennan Cos.

Earlier in her career, in 2003, she joined the now-defunct Adelphia Communications Corp. to have a hand in untangling one of the largest and most complex bankruptcy cases in U.S. history.

In 2008, she left Adelphia to become finance chief at March & McLennan, which was then still reeling from a $850 million settlement of civil bid-rigging allegations with New York regulators in 2005, and helped return it to health.

Cliff Gallant, who follows Marsh for Keefe Bruyette & Woods, said he worried about the financial health of most firms he followed during the financial crisis, but he “didn’t worry about Marsh & McLennan at all,” thanks largely to his confidence in Ms. Wittman.

Ms. Wittman said that getting up to speed at Motorola Mobility has been “far more complicated than [she] had expected,” and her challenge is to take its “overcomplicated” business and “simplify it.”

That process includes a plan unveiled this summer to cut about 20% of the unit’s workforce and close or consolidate about a third of its global facilities. Google is also said to be seeking a buyer for Motorola Mobility’s set-top cable-box business for somewhere around $2 billion, and at least one company has confirmed it is a bidder for the business. Ms. Wittman declined to comment.

Selling the business, however, would mean getting rid of Motorola Mobility’s higher-margin operations. The set-top-box business generated almost a third of the unit’s revenue last quarter but was responsible for barely 4% of its unadjusted operating loss.

Investors haven’t focused on Motorola Mobility’s margins as they await Google’s typically strong fourth-quarter results. But that could change as its new phones are unveiled early next year and their prospects are evaluated, said analyst Daniel Salmon of BMO Capital Markets, who rates Google “outperform.”

The big reason Google bought the company was to acquire its patents to help defend against lawsuits, Mr. Salmon said, so there are “very low expectations for what the hardware business can produce.”

But Ms. Wittman said the future of Motorola Mobility lies in its mobile devices, and that Google co-founder and CEO Larry Page “is fascinated with hardware.”

“Failure is not an option,” Ms. Wittman said. She predicted that by late May, a year from when Google closed the deal, Motorola Mobility will have undergone “one of the most dramatic transformations in an American business.” She declined to provide further details.

Deloitte's Financial Reporting Alert discusses certain key accounting and financial reporting considerations related to the current economic conditions in the eurozone and Puerto Rico, including a summary of financial reporting implications that would result from a country's decision to exit the eurozone and an outline of disclosures recommended by the SEC in 2012 about European sovereign debt.